Every week we provide insights into popular assets and hot questions, so you can easily learn more about the investment market in bite-sized pieces.
In this Markets in Focus we take a closer look at Ethereum.
What Is Ethereum
Ethereum is a decentralized global software platform built on blockchain technology. It is best known among investors for its native cryptocurrency, ether (ETH), and among developers for its role in blockchain and decentralized finance (DeFi) application development. Designed to be scalable, programmable, secure, and decentralized, Ethereum allows anyone to create and deploy secured digital technologies. While its token, ether, primarily fuels transactions and computational work on the blockchain, it can also be used for purchasing goods and services where accepted.
Ethereum's influence extends well beyond just ether. Its ERC20 token standard has been the foundation for numerous cryptocurrencies, many of which started as ERC20 tokens before transitioning to their own independent networks (mainnets). However, as Ethereum's popularity soared, so did the cost of transactions, known as "Gas." These rising costs, especially during market surges, led to the emergence of competing platforms like Cardano (ADA) and Solana (SOL).
Key Factors to Consider When Trading Ethereum
When trading Ethereum, it's essential to monitor a range of factors that can influence the cryptocurrency's market dynamics:
- Ethereum Foundation Announcements: As the leading force behind Ethereum's development, updates on network upgrades, enhancements, or changes in the roadmap can significantly affect ETH's price.
- Vitalik Buterin's Insights: The co-founder of Ethereum, Vitalik Buterin, holds considerable sway in the crypto community. His statements, social media activity, and interviews often provide insights into Ethereum's future.
- DeFi Projects on Ethereum: Decentralized Finance applications built on Ethereum drive significant demand for ETH. Developments in prominent protocols like MakerDAO, Aave, Compound, and Uniswap can have a direct impact on ETH's value.
- Initial Coin Offerings (ICOs) and Token Sales: As many new projects launch using Ethereum, successful ICOs and token sales can draw substantial attention and potentially influence ETH's price.
- Enterprise Adoption: Corporate use of Ethereum for blockchain solutions can increase confidence in the platform and drive demand for ETH, boosting its market value.
- Regulatory Developments: Changes in the regulatory landscape can affect investor sentiment and the price of ETH, making it crucial to stay updated on relevant news.
- Exchange Listings: Listings of ETH on major exchanges can enhance liquidity and trading volume, which could lead to price movements.
Trading Ethereum CFDs
You can trade Ethereum CFDs with 2x leverage via the Change App from Monday to Friday.
We wish you a successful trading week with Ethereum and the other 13 cryptocurrencies available for CFD trading.
Until next week!
